Car Rental Driving Toward Economic Recovery

Returning transaction volumes, strong local market rentals and corporations' perception that car rental is a good value are among the factors steering the car rental industry toward economic recovery in 2003, with rentals in airport markets up between 10 percent and 15 percent over January of last year, according to Abrams Travel Data Services' Car Rental Market Scan, released today.

In the third quarter of 2002, the last period for which all revenue is available, only ANC Rental Corp. reported a loss--and a sizeable one at 26.5 percent. Otherwise, Budget reported the smallest profit margin at 3.2 percent, and Hertz the largest at 9.4 percent, citing a favorable impact from the local market.

Though the report notes that a recent reduction in the time between booking and renting leaves the industry less able to predict travel patterns, car rental executives say the industry still has better control over costs by tightly managing its fleet. We can give the cars back so we don't have the assets sitting there empty," said Samuel Katz, chief strategic officer of Cendant and chairman and CEO of Cendant's travel distribution division.